Wednesday, August 18, 2010

I have some thoughts that may be useful to go deeper into "our toxic beliefs and attitudes about money, growth and what constitues success and "progress". Some of these thoughts go "5 Deep" (1: Behaviors/Actions -> 2: Systems/Structures -> 3: Mind -> 4: Codes -> 5: Life Conditions), directed toward understanding and learning about where we are on our journey to the leading edge of who we are as individuals and as civilization(s).

Values ("Individual Interior" in the AQAL model)
The values of "economic growth" (Orange StriveDrive) and "healthy ecology" (Green Communitarian) are at odds with each other. This is what the theory of Spiral Dynamics predicts, as the center of gravity of the homo sapiens sapiens living system (collective as well as individual) shifts to a more complex way of seeing the world (Entering Green) -- as a living system in relationship with, rather than our current system (Exiting Orange) -- dominant over.

The theory also suggests that the struggle out of one system and into another one, especially collectively, can be a violent one. Chaos Theory suggests that any living system reaches a place in its evolutionary journey called a bifurcation point, which is a time in the system where far-from-equilibrium life conditions are influencing the system. This is also known as a tipping point. In those conditions, the butterfly effect gets much stronger, so that a small perturbation in the system can trigger a significant change (what some have dubbed the Singularity).

At this point the system goes kind of "out of control" and "re-organizes" itself. The reality of that re-organization is that some of the system will die in order to allow the new system to emerge. This triggers a "need to survive" message (what Spiral Dynamics calls a downshift in Life Conditions) to the existing system. This influences the various parts of the system to downshift their values in order to respond to the changing Life Conditions. That downshift also manifests as having less ability to handle the emerging new complexity... this is like a self-fulfilling prophecy that eventually does lead that part of the old system to die.

So the way forward is through... not back. That involves opening up our thinking... expanding our vision... letting go of old unhealthy patterns (individually and culturally)... and finding ways to not contract when we experience parts of the system dying. Andrew Harvey puts it well: "We are now, as a race about to move into the eye of the storm that will decide the future of the race and the planet. It is crucial for all of us to know as the crisis deepens that what will look and feel like destruction is the stripping away of delusions."

The key, of course, is to be comfortable living in the unknown, seeing and embracing paradoxes, living "lightly" in my deeply held beliefs, which may or may not be resonant with the new emerging system.

Metrics (Collective Exterior)
Metrics are feedback loops -- ways the system knows about itself. <i>"What you measure, you can change."</i> The 'yardstick' we've been using heretofore to define "success" is GDP -- Gross Domestic Product -- which is basically all of the economic activity of a country. Well, GDP is an outdated and unhealthy measure for the new system which is emerging. Thus letting go of rating ourselves using GDP will accelerate the transition. Living systems all have a tendency to fight major transitions ("deaths")... embracing what is inevitable, instead of fighting against it, also accelerates the transition. There are a number of metrics available that come from the future emerging system... because individuals have been living in this new emerging system for a long time... it's just that it's now becoming more of a collective phenomenon. As the collective begins using these new metrics (Quality of Life indicators, etc.), we will get different signals fed back to us that will lead us more in the direction we want to go.

Change
The core energetic that is emerging now is change... from an existing system to a new one. There are many ways of looking at change, and I like the way Spiral Dynamics describes it. We tend to think of Change as one thing, but it's actually got a lot of nuances to it. One of those nuances is that there are "small" changes (what SD calls "first-order" changes) and big "second-order" changes that are inherently more difficult to embrace. In my last blog, I pointed out a first-order change strategy, which even though it might feel huge, is actually keeping the current system fundamentally unchanged. What Bud is talking about in his response is second-order change, and that is a very different animal. Most times on the evolutionary journey, transitions from one level of complexity to a more complex level requires second-order change... especially if there's major resistance against change, hanging onto the status quo as tightly as possible.

So the practice is to let go and enjoy the ride... much easier said than done, but it's why so many people are voluntarilly "powering down" their lives -- "voluntary simplicity". But the deeper motivations for doing so are different than the motivations perceived by the existing less-complex system. Spiral Dynamics suggests that we each see "life" through the lens of our value system(s) (which can change in each moment, but there's a "center-of-gravity".) So seeing behavior out in the world (of people), we overlay our values onto that behavior (or expression). But if we want to understand why the people themselves are creating that expression, we need to ask them what their underlying values are. You cannot tell the underlying values behind a behavior of another -- we tend to project our own value system onto their behavior. In order to find out, you must inquire.

Leadership
So what does all of this tell us about leadership? We've learned some interesting things:

Leaders really need to be operating at a level of complexity beyond the people they are leading.

Leaders also need to be able to communicate effectively to the people they are leading, while still holding true to their vision. We call this "leading from half a step ahead."

The emerging leadership necessary to lead in the 21st century must by default have done enough personal work that they understand the appropriate role of ego in the leadership process. Transparent Leadership is one way of putting it... the inter-relatedness of everything must be the background from which the concept of separateness/ego is but a part of the evolutionary journey, itself a process to be transcended.

Leadership needs to be proven by example... there are myriads upon myriads of points of view... ideas. What's important is how those ideas translate into form... leadership is about making the translation as accurate as possible, in each moment. Another word for this is Presence.

Leadership understands and embraces the concept of paradox -- two seemingly opposite ideas co-arising at the same time, both seemingly true. The world is nothing, if not a world of paradoxes. Recognizing this is the key to being a lifelong learner, rather than a narrow-minded knower.

The best example I've run across lately of this kind of leadership is Thomas Jefferson, author of the Declaration of Independence. I watched Ken Burns' documentary on PBS and marvelled at the value system Jefferson operated out of... truly inspirational. And of course, it has as much, if not more, chaos running through it as any other value system. Evolution simply is not about happiness... it's about adaptation. That's the nature of leadership in the 21st century.

These are some thoughts which go quite deep. I welcome your additional thoughts and inquiries.

Tuesday, May 11, 2010

Like many of you out there, I am continually amazed that the housing crisis seems to be getting much worse, despite all of the government programs supposedly designed to solve the problem. Obviously whomever the government has been listening to is providing lousy solutions... at least for the majority of Americans whose houses are currently worth less than their mortgages (thankfully, my house is not one of them).

If we look at all of the solutions currently in place by the government, it's clear that there are indeed a few "winners" in this current situation:

Many of the banks, who are receiving lots of money and loan guarantees from the government to cover the bad mortgages on their books;

Many homeowners, who, after refinancing and squeezing all the equity out of their homes that they could (and that the banks would gladly let them have), are simply walking away from their homes, letting the banks keep them.

I watched a segment of "60 Minutes" about people who are walking away from their mortgages, even though they could continue paying them, because it's the best business decision... this despite competing core values of guilt in not keeping their commitment to the mortgage contract. This is a classic example of "competing values" -- in Spiral Dynamics language, of Blue "moral obligation to keep a promise" and Orange "the best business decision is to walk away from a bad deal." These folks are "voting with their values" by choosing their Orange ones over their Blue ones.

Another article states that the U.S. is headed for a ten-year backlog in distressed (unsold) houses... that's the kind of thing that's going to provide an emergency brake on any kind of economic growth (almost always fueled by a thriving housing market of less than one year's worth of houses on the market at any given time).

So what's the current plan to manage this? The banks, rather than simply dealing with these houses which have lost sometimes up to half of their "value" (in terms of the mortgage on them), are keeping them on their books at their original inflated values, hoping either for a government bailout, or for prices to come back up closer to those inflated values. This is an example of the government enabling a very unhealthy behavior for everyone. People are walking away from their homes, leaving them empty, not taken care of, and turning them into neighborhood blights, bringing down all the other home values in the neighborhood in a reinforcing downward spiral of home values. This is not a healthy solution.

My solution is much simpler:

Create a neutral "arbitration panel" in each city, made up of average citizens, like a jury of some kind.

A homeowner about to walk away from their "under-water" mortage gets a serious audit to find out how much money they and their family have.

The bank shows up with a few appraisals of what the house is currently worth.

The arbitration panel's job is to determine the value of a new mortgage on the home that would allow the homeowner to remain in the home, at very favorable interest rates for the first 5 years.

The panel would take into consideration whether the homeowner has enough assets to pay a down payment or not.

The bank gets a write-off of the difference between the old and new mortgage, which can be used to offset its tax burden.

Voila! One less house on the market, one more family able to stay in their homes, and the banks "reset" their toxic assets. We'd probably be out of the woods in a year or two.

Note this is not unlike some of the current plans that I've seen... the difference is that the banks would be required to do this, not have it be an option for them. That's what the current problem is, as I see it... the banks refusing to deal with their toxic waste, albeit being nudged along by the government. It's time the government forces the banks to take their medicine, in order for the American economy to start its recovery.

Monday, March 29, 2010

I was moved to read a letter that the late Stewart Udall wrote to his grandchildren at the beginning of this century.

Stewart Udall was perhaps the most influential U.S. Secretary of the Interior ever. He served in the Kennedy and Johnson administrations from 1961 to 1969, and played a major role in some of the nation's landmark environmental laws, including the Clean Air Act, the Wilderness Act and the Land and Water Conservation Fund Act. I hope you find it as moving as I have... BEN

My dear ones, your generation will face a series of environmental challenges that will dwarf anything any previous generation has confronted. I'm hoping to add some insights of my own based on things I learned as a policymaker in the 1950s and '60s, when I observed and participated in some monumental achievements and profound misjudgments. As a freshman congressman in 1955, I regrettably voted with my unanimous colleagues for the Interstate Highway Program. All of us acted on the shortsighted assumption that cheap oil was super-abundant and would always be available. This illusion began to unravel in the 1970s, and it haunts Americans today. Oil lies at the epicenter of a critical energy crisis. Petroleum is a finite resource and is the most precious, versatile resource on the planet. Cheap oil played a crucial role in the development of American power and prosperity, and sustains the military machine that dominates the world today. Oil is now nearing a historic transition that will alter the civilization Americans have come to take for granted. As world oil production reaches its apex and begins its inevitable decline, it will have a radical impact on everyday American life. It will take bold political leadership and awareness on the part of individual citizens to craft a full-scale, creative response. I watched with admiration in 1974 as my friend, President Gerald Ford, persuaded Congress to adopt a 55 mph speed limit to reduce our reliance on imported oil. He also got a law passed which mandated production of more fuel-efficient automobiles.

I am convinced that the American people will tighten their belts if a president forges a national strategy to stretch the life of our oil reserves and to adjust to a long-range plan of energy conservation. Energy efficiency must be the rallying cry. Higher oil prices are already serving as a wake-up call. Despite an utter lack of leadership from the White House, a few progressive states and cities are building light-rail systems to serve urban residents and commuter trains to connect their communities. I urge you to be stalwart supporters of any projects that promote fuel efficiency and conservation for all citizens.

You also must contend with the carbon dioxide problem. Once it is released into the atmosphere, this gas has a long life (approximately 100 years), spreads over the entire globe, and acts as a blanket that warms all parts of the earth. The United States and China are responsible for producing over 40 percent of the CO2 that is altering the earth's atmosphere. Consequently, these two nations have a moral responsibility to be in the forefront of any global campaign to develop new technologies to cut the emissions of this damaging pollutant. I have recently proposed that these two countries join together in a 50/50 research venture, and assemble teams of engineers and scientists to work together to develop technologies to capture carbon as it emerges from coal power plants. These teams would perfect technologies to isolate the carbon and transport it through pipelines to storage sites in the deep ocean or in depleted oil and natural gas fields. The success of such international cooperation would set an example that could spur development of new supplies of renewable energy. All climates would benefit from advances produced by such an enterprise. Today, China has the most polluted air in the world and suffers the most premature deaths from gross air pollution. These same teams of scientists could also devise technologies to capture the deadly pollutants that shorten the lives of millions of people in all parts of the world.

Even though scientists can solve many technological problems, a word of caution is in order. I learned during my government service that even the most gifted researchers couldn't perform technical miracles. The skilled engineers at the Interior Department built the first direct current line to transmit huge blocks of electricity from hydroelectric dams on the Columbia River to Los Angeles by simply flipping a switch. But the same engineers couldn't develop a cheap technique to desalinate seawater. One further example will dramatize my point. In the summer of 1969, after our astronauts completed their round trip to the moon (a brilliant but narrow feat), most Americans were overwhelmed by the promises that became the mantra of that exciting moment. The slogan, "This proves we can do whatever we want to do," influenced the mindset of Americans and generated a vision of a future with no restraints or limits. President Richard Nixon, quickly rebuked for his wild rhetoric by the Rev. Billy Graham, characterized the accomplishment as "the greatest week since the creation of the earth." A gusher of extravagant prophecies followed, predicting that a new planet of superabundant resources had magically come into existence followed. Though scientists regarded such predictions as Alice in Wonderland speculation, they were generally ignored; dissent was not welcome during this moment of triumph.

Meanwhile, Americans' vision of the future was warped; they believed, falsely, that technologists could perform miracles that would solve any future energy problems. Ignored was the nation's ever- increasing dependence on oil produced by other countries. Worse yet, this new vision offered assurances that our own oil wells would never run dry, and it has persuaded many of the current leaders of our nation that global warming is a myth. Having said that, technology may yet help solve our current problems. Some of the world's best architects and designers are already working on changes in the design of buildings and cities, which will reduce requirements for electricity by as much as 50 percent by 2050. Such advances won't be enough, however. Americans must finally cast aside our notion that we can continue the wasteful consumption patterns of our past. We must promote a consciousness attuned to a frugal, highly efficient mode of living. In closing, I leave you with these thoughts, and hope you will hold to these ideals throughout your lives: Foster a consciousness that puts a premium on the common good and the protection of the environment. Give your unstinting support to all lasting, fruitful technological innovations. Be steadfast enemies of waste. The lifetime crusade of your days must be to develop a new energy ethic to sustain life on earth.

In the 1960s, when the carbon problem and the exhaustion of the world's petroleum were still beyond our gaze, I advocated a new ethic to guide our nation's stewardship of its resources. I realize now this approach was too narrow, too nationalistic. To sustain life on our small planet, we will need a wider, all-encompassing planetary resource ethic based on values implemented by mutual cooperation. This ethic must be rooted in the most intrinsic values of all: Caring, sharing, and mutual efforts that reach beyond all obstacles and boundaries. Go well, do well, my children. Cherish sunsets, wild creatures and wild places. Have a love affair with the wonder and beauty of the earth. Carry our love in your hearts....
Stewart and Lee Udall

Thursday, March 4, 2010

TEODAWKI -- The End Of Democracy As We Know It. That's the period that we're living in at the moment. Democracy -- rule by the people -- is on its way out (if it was ever really in?). How do we know this? It's obvious when you look at the underlying structure of how our country works right now. For the first rule of systems thinking is, structure influences behavior. So while we still supposedly have a democratic government, structurally we have something quite different, which leads to behavior which is anything but democratic.

Sure, we still hold elections where people vote in representatives, who in turn are supposed to listen to what their constituents want, and then argue with each other about what the best legislation is to give the most people what they mostly want. That's how it's supposed to work. But of course, it doesn't work that way any more. Thus democracy is evolving... but the big question is, what is democracy evolving into?

There are a number of structural shifts that are taking place. Lawrence Lessig wrote a recent blog called "Systemic Denial" that articulates one of these, which is basically that, because of the current structure of how elections are financed, politicians are basically addicted to raising money for their reelection campaigns. A significant percentage of a politician's time is spent raising money so they can continue to be a politician. That structure, which can be easily changed, is at the core of why democracy is on its way out. The solution, of course, is a simple one -- public financing of all elections, including judicial as well as congressional and presidential. Lessig's comment on his blog is that while this solution is the obvious one that we should be talking about, even when you bring a serious group of high-thinking experts into a room to talk about how to make things better, the concept of public financing of all elections isn't even brought up for discussion.

Without public financing of elections, what we end up (and what we have) are lobbyists and mega-corporate money flowing into the coffers of elected officials so that they can spend that money on their re-elections, in exchange for preferential treatment from the sources of that money in the legislation that is created and ultimately voted into law. This is such a common idea that no sane person doubts this is true. Yet the idea of questioning whether it's actually a good thing isn't even brought up for discussion, except among the vast majority of U.S. citizens who don't think it's a good idea, but who, for obvious reasons, don't have any control over changing it.

Here's another structural issue that's at the root cause of the problem: the politicians who are reaping the benefits of the current structure of financing are the only ones who can change the structure. We certainly can't rely on the Supreme Court, as we have just had a 5-person majority ruling that corporations -- legal entities with limited liability -- are deemed to have the same rights as people do, especially when it comes to "free speech" in giving money to political campaigns.

Bill Moyers, one of the greatest champions of democracy in the last century, did a recent segment of his Journal where he covered this very topic, but from a very different, and less known, perspective... that of the corporate influence not only in congressional financing, but also in the financing of the election of judges in 39 states. Entitled "Judges for Sale," it reveals that most of the judges in this country, including the Supreme Courts of most states, are elected by public vote. They, therefore, are also immersed in the addictive structure of needing to raise money to be (re)elected. This is a serious, serious problem in our country, because the one branch of government which must be seen as being impartial is our judicial system... and that system is becoming as corrupt and subject to corporate influence as the rest of our political system. For it is very clear that the vast majority of elections are won by those who spend the most money. And it is far, far easier to raise a lot of money from a relatively small number of large donors than it is a relatively large number of small donors (the internet not withstanding). Thus the downward cycle of democratic destruction perpetuates itself, and democracy loses more and more of its structural reality, replaced with a corporate-political marriage that leaves the average citizen left out of the decision-making process.

The problem is that we know what the solutions are. We know how to fix the structural problems that are slowly but surely destroying democracy, and destroying most of America. But we simply don't have the power and influence right now to implement those structural changes, because the entities that need to enact those changes are exactly the ones that are most benefitting from the current system, and they have basically rigged the system to keep it that way. All of the major players, including the corporate media, are involved in this structural inertia, and that's simply the way it is.

This is the way evolution is heading at the moment. That much is clear. This is what is. The big question is, what can each of us do about it? My current thinking is similar to the thinking of many people who see this as just one of many downward spirals that are reinforcing themselves, getting stronger and stronger as the days go by... start designing lifeboats. Recognize that strengthening local communities is one of the most empowering, and effective, ways to avoid relying on any governmental structures to "do the right thing". Set up your own small communities, start to grow your own food, design your own systems of thrival, and practice local resilience... I can guarantee you that you'll never be sorry you did.

Wednesday, February 10, 2010

The world will be sadder this coming May when Bill Moyers retires from doing his weekly Journal on PBS. His is the quintissential expression of journalism which blends liberal thinking with a practical feeling for what is healthy for democracy and what is not. This last week's Journal is an excellent example. You can watch it for free on PBS (http://www.pbs.org/moyers/journal).

The first segment I would recommend was actually shown last. Dr. Margaret Flowers (http://www.pbs.org/moyers/journal/02052010/profile3.html) took President Obama's State of the Union plea to bring him health care solutions that work to heart, and tried to deliver a letter about single-payer healthcare. Most every developed country in the world has found this to be the best way to provide their citizens with health care, and if monitored carefully to avoid fraud (something our current Medicare system does dismally, but which is totally fixable, given enough resources), is the least expensive solution. Mind you, it does do away with most private healthy insurance companies (but not all of them... New Zealand is an example where there is both private and public insurance for all)... but it puts the government system first, with private insurance companies as a secondary backup. Note Dr. Flowers did not have any success getting her message across, due to the fact that all of the government doors were closed to her... while lobbyists and big corporations get doors flung open for them, mainly because of the power of their pocketbooks.

This leads to the second segment (shown first on the program) about the impact of the recent Supreme Court decision to allow unlimited political advertising by corporations up until the day of an election (http://www.pbs.org/moyers/journal/02052010/profile.html). This is a debate with Lawrence Lessig and Nick Gillespie about the ramifications of this decision. Lawrence Lessig teaches law at Harvard, and is advocating for a constitutional convention to modify the constitution to, among other things, mandate for public campaign financing.

Nick Gillespie is a libertarian journalist whose message is, "the more freedom of speech, the better!" It doesn't matter if corporations can buy all the political speech they want to (and say whatever they want???). The government should not interfere with freedom of speech by anyone (or anything.)

What I found most interesting about the debate is that they were focusing on different issues. Dr. Lessig's message is that the more corporations take over the political "message-space" through their much larger pockets, the less healthy democracy we get, in terms of individuals feeling like their votes count for anything. Gillespie's message is not about democracy, it's about freedom of speech... he says that what's not healthy about our system has nothing to do with corporations having free speech, it's about government being so big that corporations can afford to pay lobbyists and Congress to get onto the government's "payroll" so to speak, through the legislation process. This is a totally different matter than corporate free speech (but is related to the "money = speech" argument.

I can see both points of view. It's clear that the structures that we currently have are not creating healthy expressions of democracy, at least for the majority of the American people. I DO support public campaign financing, if only to remove a huge burden on Congress to be constantly having to raise money, all throughout their tenure. That would help remove a lot of the influence that corporations have on Congress (but not all of it... there are still lobbyists who have much better access to Congress than the average citizen does). I also support a constitutional amendment that free speech is a right of people, not corporations. Corporations are specific legal structures with a narrow, self-interested mandate (to make a profit) allowed to exist by individual states (and countries). Given their narrow mandate, and how much they can focus power and money, their rights need to be limited, not given free rein, if we wish our democracy to survive.

Sunday, February 7, 2010

I would like to draw your attention to the article in The Economist about a junior senator from Washington who is sponsoring a cap-and-dividend bill that deserves our support. Because of copyright issues, I cannot reproduce the article here, but here's the URL: http://www.economist.com/world/united-states/displaystory.cfm?story_id=15453166A refreshing dose of honesty
Feb 4th 2010
Maria Cantwell and the politics of global warming

This is the kind of healthier approach that we all should consider supporting, and encouraging our senators and President Obama to support as well. If the majority of Americans want this kind of legislation, then our democracy demands that it be considered, without the special interests looking out only for their own gain, getting in the way.

THE PRESIDENT: But let's talk about just the jobs environment generally. You're absolutely right that when I was sworn in the hope was that unemployment would remain around 8 [percent], or in the 8 percent range. That was just based on the estimates made by both conservative and liberal economists, because at that point not all the data had trickled in.

We had lost 650,000 jobs in December. I'm assuming you're not faulting my policies for that. We had lost, it turns out, 700,000 jobs in January, the month I was sworn in. I'm assuming it wasn't my administration's policies that accounted for that. We lost another 650,000 jobs the subsequent month, before any of my policies had gone into effect. So I'm assuming that wasn't as a consequence of our policies; that doesn't reflect the failure of the Recovery Act. The point being that what ended up happening was that the job losses from this recession proved to be much more severe -- in the first quarter of last year going into the second quarter of last year -- than anybody anticipated.

So I mean, I think we can score political points on the basis of the fact that we underestimated how severe the job losses were going to be. But those job losses took place before any stimulus, whether it was the ones that you guys have proposed or the ones that we proposed, could have ever taken into effect. Now, that's just the fact, Mike, and I don't think anybody would dispute that. You could not find an economist who would dispute that.

Now, at the same time, as I mentioned, most economists -- Republican and Democrat, liberal and conservative -- would say that had it not been for the stimulus package that we passed, things would be much worse. Now, they didn't fill a 7 million hole in the number of people who were unemployed. They probably account for about 2 million, which means we still have 5 million folks in there that we've still got to deal with. That's a lot of people.

The package that we put together at the beginning of the year, the truth is, should have reflected -- and I believe reflected what most of you would say are common sense things. This notion that this was a radical package is just not true. A third of them were tax cuts, and they weren't -- when you say they were "boutique" tax cuts, Mike, 95 percent of working Americans got tax cuts, small businesses got tax cuts, large businesses got help in terms of their depreciation schedules. I mean, it was a pretty conventional list of tax cuts. A third of it was stabilizing state budgets.

There is not a single person in here who, had it not been for what was in the stimulus package, wouldn't be going home to more teachers laid off, more firefighters laid off, more cops laid off. A big chunk of it was unemployment insurance and COBRA, just making sure that people had some floor beneath them, and, by the way, making sure that there was enough money in their pockets that businesses had some customers.

You take those two things out, that accounts for the majority of the stimulus package. Are there people in this room who think that was a bad idea? A portion of it was dealing with the AMT, the alternative minimum tax -- not a proposal of mine; that's not a consequence of my policies that we have a tax system where we keep on putting off a potential tax hike that is embedded in the budget that we have to fix each year. That cost about $70 billion.

And then the last portion of it was infrastructure which, as I said, a lot of you have gone to appear at ribbon-cuttings for the same projects that you voted against.

Now, I say all this not to re-litigate the past, but it's simply to state that the component parts of the Recovery Act are consistent with what many of you say are important things to do -- rebuilding our infrastructure, tax cuts for families and businesses, and making sure that we were providing states and individuals some support when the roof was caving in.

And the notion that I would somehow resist doing something that cost half as much but would produce twice as many jobs -- why would I resist that? I wouldn't. I mean, that's my point, is that -- I am not an ideologue. I'm not. It doesn't make sense if somebody could tell me you could do this cheaper and get increased results that I wouldn't say, great. The problem is, I couldn't find credible economists who would back up the claims that you just made.

Now, we can -- here's what I know going forward, though. I mean, we're talking -- we were talking about the past. We can talk about this going forward. I have looked at every idea out there in terms of accelerating job growth to match the economic growth that's already taken place. The jobs credit that I'm discussing right now is one that a lot of people think would be the most cost-effective way for encouraging people to pick up their hiring.

There may be other ideas that you guys have; I am happy to look at them and I'm happy to embrace them. I suspect I will embrace some of them. Some of them I've already embraced.

But the question I think we're going to have to ask ourselves is, as we move forward, are we going to be examining each of these issues based on what's good for the country, what the evidence tells us, or are we going to be trying to position ourselves so that come November we're able to say, "The other party, it's their fault." If we take the latter approach then we're probably not going to get much agreement. If we take the former, I suspect there's going to be a lot of overlap. All right?

THE PRESIDENT: Here's what I'm going to do, Mike. What I'm going to do is I'm going to take a look at what you guys are proposing. And the reason I say this, before you say, "Okay," I think is important to know -- what you may consider across-the-board tax cuts could be, for example, greater tax cuts for people who are making a billion dollars. I may not agree to a tax cut for Warren Buffet. You may be calling for an across-the-board tax cut for the banking industry right now. I may not agree to that.

So I think that we've got to look at what specific proposals you're putting forward, and -- this is the last point I'll make -- if you're calling for just across-the-board tax cuts, and then on the other hand saying that we're somehow going to balance our budget, I'm going to want to take a look at your math and see how that works, because the issue of deficit and debt is another area where there has been a tendency for some inconsistent statements. How's that? All right?

CONGRESSMAN RYAN: Say hi, everybody. (Laughter.) I serve as a ranking member of the budget committee, so I'm going to talk a little budget if you don't mind. The spending bills that you've signed into law, the domestic discretionary spending has been increased by 84 percent. You now want to freeze spending at this elevated beginning next year. This means that total spending in your budget would grow at 3/100ths of 1 percent less than otherwise. I would simply submit that we could do more and start now.

You've also said that you want to take a scalpel to the budget and go through it line by line. We want to give you that scalpel. I have a proposal with my home state senator, Russ Feingold, bipartisan proposal, to create a constitutional version of the line-item veto. (Applause.) Problem is, we can't even get a vote on the proposal.

So my question is, why not start freezing spending now, and would you support a line-item veto in helping us get a vote on it in the House?

THE PRESIDENT: Let me respond to the two specific questions, but I want to just push back a little bit on the underlying premise about us increasing spending by 84 percent.

Now, look, I talked to Peter Orszag right before I came here, because I suspected I'd be hearing this -- I'd be hearing this argument. The fact of the matter is, is that most of the increases in this year's budget, this past year's budget, were not as a consequence of policies that we initiated but instead were built in as a consequence of the automatic stabilizers that kick in because of this enormous recession.

So the increase in the budget for this past year was actually predicted before I was even sworn into office and had initiated any policies. Whoever was in there, Paul -- and I don't think you'll dispute that -- whoever was in there would have seen those same increases because of, on the one hand, huge drops in revenue, but at the same time people were hurting and needed help. And a lot of these things happened automatically.

Now, the reason that I'm not proposing the discretionary freeze take into effect this year -- we prepared a budget for 2010, it's now going forward -- is, again, I am just listening to the consensus among people who know the economy best. And what they will say is that if you either increase taxes or significantly lowered spending when the economy remains somewhat fragile, that that would have a destimulative effect and potentially you'd see a lot of folks losing business, more folks potentially losing jobs. That would be a mistake when the economy has not fully taken off. That's why I've proposed to do it for the next fiscal year. So that's point number two.

With respect to the line-item veto, I actually -- I think there's not a President out there that wouldn't love to have it. And I think that this is an area where we can have a serious conversation. I know it is a bipartisan proposal by you and Russ Feingold. I don't like being held up with big bills that have stuff in them that are wasteful but I've got to sign because it's a defense authorization bill and I've got to make sure that our troops are getting the funding that they need.

I will tell you, I would love for Congress itself to show discipline on both sides of the aisle. I think one thing that you have to acknowledge, Paul, because you study this stuff and take it pretty seriously, that the earmarks problem is not unique to one party and you end up getting a lot of pushback when you start going after specific projects of any one of you in your districts, because wasteful spending is usually spent somehow outside of your district. Have you noticed that? The spending in your district tends to seem pretty sensible.

So I would love to see more restraint within Congress. I'd like to work on the earmarks reforms that I mentioned in terms of putting earmarks online, because I think sunshine is the best disinfectant. But I am willing to have a serious conversation on the line-item veto issue.

CONGRESSWOMAN CAPITO: Thank you, Mr. President, for joining us here today. As you said in the State of the Union address on Wednesday, jobs and the economy are number one. And I think everyone in this room, certainly I, agree with you on that.

I represent the state of West Virginia. We're resource-rich. We have a lot of coal and a lot of natural gas. But our -- my miners and the folks who are working and those who are unemployed are very concerned about some of your policies in these areas: cap and trade, an aggressive EPA, and the looming prospect of higher taxes. In our minds, these are job-killing policies. So I'm asking you if you would be willing to re-look at some of these policies, with a high unemployment and the unsure economy that we have now, to assure West Virginians that you're listening.

THE PRESIDENT: Look, I listen all the time, including to your governor, who's somebody who I enjoyed working with a lot before the campaign and now that I'm President. And I know that West Virginia struggles with unemployment, and I know how important coal is to West Virginia and a lot of the natural resources there. That's part of the reason why I've said that we need a comprehensive energy policy that sets us up for a long-term future.

For example, nobody has been a bigger promoter of clean coal technology than I am. Testament to that, I ended up being in a whole bunch of advertisements that you guys saw all the time about investing in ways for us to burn coal more cleanly.

I've said that I'm a promoter of nuclear energy, something that I think over the last three decades has been subject to a lot of partisan wrangling and ideological wrangling. I don't think it makes sense. I think that that has to be part of our energy mix. I've said that I am supportive -- and I said this two nights ago at the State of the Union -- that I am in favor of increased production.

So if you look at the ideas that this caucus has, again with respect to energy, I'm for a lot of what you said you are for.

The one thing that I've also said, though, and here we have a serious disagreement and my hope is we can work through these disagreements -- there's going to be an effort on the Senate side to do so on a bipartisan basis -- is that we have to plan for the future.

And the future is that clean energy -- cleaner forms of energy are going to be increasingly important, because even if folks are still skeptical in some cases about climate change in our politics and in Congress, the world is not skeptical about it. If we're going to be after some of these big markets, they're going to be looking to see, is the United States the one that's developing clean coal technology? Is the United States developing our natural gas resources in the most effective way? Is the United States the one that is going to lead in electric cars? Because if we're not leading, those other countries are going to be leading.

So what I want to do is work with West Virginia to figure out how we can seize that future. But to do that, that means there's going to have to be some transition. We can't operate the coal industry in the United States as if we're still in the 1920s or the 1930s or the 1950s. We've got to be thinking what does that industry look like in the next hundred years. And it's going to be different. And that means there's going to be some transition. And that's where I think a well-thought-through policy of incentivizing the new while recognizing that there's going to be a transition process -- and we're not just suddenly putting the old out of business right away -- that has to be something that both Republicans and Democrats should be able to embrace.

--jump to end--

Now, I just want to point out -- and this brings me to the second problem -- when we made a very modest proposal as part of our package, our health care reform package, to eliminate the subsidies going to insurance companies for Medicare Advantage, we were attacked across the board, by many on your aisle, for slashing Medicare. You remember? We're going to start cutting benefits for seniors. That was the story that was perpetrated out there -- scared the dickens out of a lot of seniors.

No, no, but here's my point. If the main question is going to be what do we do about Medicare costs, any proposal that Paul makes will be painted, factually, from the perspective of those who disagree with it, as cutting benefits over the long term. Paul, I don't think you disagree with that, that there is a political vulnerability to doing anything that tinkers with Medicare. And that's probably the biggest savings that are obtained through Paul's plan.

And I raise that not because we shouldn't have a series discussion about it. I raise that because we're not going to be able to do anything about any of these entitlements if what we do is characterized, whatever proposals are put out there, as, well, you know, that's -- the other party is being irresponsible; the other party is trying to hurt our senior citizens; that the other party is doing X, Y, Z.

That's why I say if we're going to frame these debates in ways that allow us to solve them, then we can't start off by figuring out, A, who's to blame; B, how can we make the American people afraid of the other side. And unfortunately, that's how our politics works right now. And that's how a lot of our discussion works. That's how we start off -- every time somebody speaks in Congress, the first thing they do, they stand up and all the talking points -- I see Frank Luntz up here sitting in the front. He's already polled it, and he said, you know, the way you're really going to -- I've done a focus group and the way we're going to really box in Obama on this one or make Pelosi look bad on that one -- I know, I like Frank, we've had conversations between Frank and I. But that's how we operate. It's all tactics, and it's not solving problems.

And so the question is, at what point can we have a serious conversation about Medicare and its long-term liability, or a serious question about -- a serious conversation about Social Security, or a serious conversation about budget and debt in which we're not simply trying to position ourselves politically. That's what I'm committed to doing. We won't agree all the time in getting it done, but I'm committed to doing it.

Thursday, January 28, 2010

I’m pretty much of a techno-weenie, being an engineer by training, a Macintosh consultant, and general technology aficionado.

Thus I have been very aware of the issues surrounding cellphone radiation and its impact on the human body, wherever it comes in contact (usually our ears). The issues are highly political, and highly profit-biased, in that those companies who stand to make the most profit (cellphone manufacturers and wireless phone companies) are the ones who are doing all of the funding of studies researching the health impacts (and, of course, not finding any negative impacts at all).

Here is one recent article, this is from GQ magazine, which again notes the clear evidence, being covered up, that ill health effects from cellphone radiation is a timebomb waiting to happen... ESPECIALLY FOR YOUNG ADULTS who spend many hours a day with their cellphones glued to their ears.

So what to do about reducing the risk of developing brain tumors if you use a cellphone a lot?
1) Stop using cellphones (or reduce usage dramatically);
2) Use a headset! This is the approach I’ve taken, and recommend to everyone who uses a cellphone. With a wired headset between the cellphone and your ear, you effectively remove the harmful effects of the electromagnetic radiation (EMR) being emitted from the cellphone during use (as long as the cellphone is not right next to your body). This is because the EMR is proportional to the cube of the distance... so its harmful effects drop off very quickly the further the cellphone is from your body.
[Note: Using a bluetooth wireless headset will still use EMR to communicate wirelessly between the headset and the cellphone, so I do not recommend using them as a substitute, even though the EMR emitted from a bluetooth headset to a cellphone a few feet away is much much lower than the EMR emitted from a cellphone, which has to communicate to the nearest cellphone tower sometimes miles away, and thus must be much more powerful.

For those of us who don’t use cell phones very often (like me), I am not worried at all about using it a few minutes a day... I do think it takes a lot of usage to have a negative impact. But for all of the parents out there, please do pay attention to this for your kids, for they are the ones who will be adversely impacted. It will take years to manifest as brain tumors, but my gut, as well as a lot of scientific evidence, says that it’s a very likely possibility that can easily be drastically reduced with a little awareness, and not much expense.

Now as for wireless internet...
The same folks who are talking about cellphone radiation being cancer-causing are also against wireless internet networks for the same reason. Many people have what is being called “Electromagnetic Hypersensitivity”, or EHS. Here is my thinking about this:

I think in-home wireless networks are VERY low powered, in terms of EMR. Yes, we are exposed to the wireless waves all the time we are in our houses, but the actual power involved is very low, and the distance between the source (i.e. the wireless router) and our bodies, is typically many feet.

However, I am very wary of the implementation of large-scale (i.e. city-wide) wireless networks, called WIMAX, that are being tested in cities around the world. This, to me, is another disaster waiting to happen... at least for those people who have EHS. Obviously as an evolutionary “stressor,” we can learn eventually to adapt to this new parameter in our “life conditions”... but I’m not sure such a wide-scale implementation is healthy for human beings... they don’t call places where wi-fi can be accessed “hot spots” for nothing.

Wednesday, January 27, 2010

Below is a link to a lecture given by George Soros at the Central European University in October 2009. In it he articulates the current state of the global financial economy, and a clear notion of how we can move forward to restructure it. Anything in brackets are my own comments. You can watch the lecture here:

We are at a moment in which the range of uncertainties is unusually wide.

What makes this financial crisis different from previous ones [i.e. the Japanese real estate bubble, or the Great Depression] is that this crisis involves the entire world.

The magnitude of the credit and leverage (debt) problem today is more than double what it was when the stock market crashed in 1929.

In spite of that, this time the financial system was not allowed to collapse [so far…]

The recovery is liable to run out of steam, possibly followed by a double-dip recession in 2010 or 2011.

The prevailing mood is far removed from reality; this is characteristic of far-from-equilibrium situations when perceptions tend to lag behind reality.

The disarray in the international financial system is matched by instability in international relations; the New Order that will eventually emerge will not be dominated by the U.S. to the same extent as the old one.

Financial markets are a branch of history, greatly influenced not just by economic theory, but also by politics, which establishes the rules and conditions in which the market operates.

There are two tiers to the international financial system: the center and the periphery. Those countries who can borrow in their own currency constitute the center, and those countries whose borrowing is denominated in one of the hard currencies constitute the periphery. While the rules for borrowing are similar for both tiers, if the center becomes endangered, then preserving the system takes precedence over all other considerations [especially consideration for the people in the periphery countries].

Previous international financial crises originated in debtor nations, whose bailouts were securitized by the banks, leading to harsh measures placed on the people of those nations, as well as financial discipline and bailouts of banks whose collective failure would have endangered the system.

The financial crisis of 2007-2008 was different because it originated at the center, and the periphery countries were drawn into it only later. The IMF did a good job in managing this crisis, which began mainly in the private sector.

The failure of Lehman Brothers was a game-changing event, leading to a crisis of faith in the system, and financial markets ceased to function. Countries in the center interceded, effectively guaranteeing that no other institutions whose failure could endanger the system would be allowed to fail.

That’s when it spread to the periphery, because those countries couldn’t provide equally credible guarantees. But the center pumped money into the system, engaging in deficit financing to simulate the global economy on an unprecedented scale, and the current view is that the situation is stabilizing, slowly returning to “business as usual”.

This is likely not to be the case; the system is broken, and cannot be put back together again. This is because it was based on a premise that allowed financial capital to move around freely in the world, making it difficult to tax or regulate. This put financial capital in a privileged position. Governments had to pay more attention to the requirements of international capital than to the aspirations of their own people. But this system ended up to be very unstable because it was based on the false premise that financial markets can be safely left to their own devices. This is why it broke, and why it can’t be put back together again.

Global markets need global regulations. But the current regulations are rooted in the principle of national sovereignty as the ultimate source of authority. This gives rise to financial protectionism, which is at odds with a global financial system.

Thus a new regulatory system that is international in scope needs to be created from scratch.

In the current picture, the U.S. stands to lose the most, and China stands to come out as the greatest winner.

The U.S. has been the de facto international currency ever since the second World War, and it has derived immense benefit from that position. But starting in the 1980s, it has built up an ever-increasing account deficit, which along with the excessive amount of private-sector debt [households, mortgages, etc.] has lead to this crisis. The banking system has suffered, and now needs to earn its way out of a hole. In commercial real estate and leveraged buyouts, the blood-letting is still to come.

Because of these factors, the American consumer will no longer serve as the motor for the world economy.

China, on the other hand, has been largely insulated from the financial crisis, being seen as an external event that has hurt exports, but left its financial, political and economic system unscathed.

China has discovered a remarkably efficient method of unleashing the creative, acquisitive, and entrepreneurial energies of the people, who are allowed to pursue their self-interest, while the state can cream off a significant portion of the surplus value of their labor by maintaining an undervalued currency and accumulating a trade surplus. So China is likely to emerge as the big winner.

At the same time, China’s command-and-control economy must also avoid social unrest if it wants to remain stable, and needs to keep its economic growth rate at a minimum of eight percent in order to create new jobs for a growing workforce. Its internal stimulus programs can be a smaller motor for the world economy. This is a tectonic shift, as other countries reorient themselves towards the source of positive impulses. This may not be permanent or irreversible, but it represents the most predictable and significant trend in the global political economy.

While China is practicing “state capitalism”, the rest of the world is currently under the auspices of the “Washington Consensus” of “international capitalism.” These two systems are in competition with one another. Each has its pros and cons. The Washington Consensus has failed – international capitalism in its present form has proven itself inherently unstable because it lacks adequate regulation. It’s also highly unjust because it favors the ‘haves’ over the ‘have-nots’.

At the same time, an international system based on state capitalism would inevitably lead to conflicts between states. The first signs of conflict are already beginning to surface, because, ironically, China is repeating the mistakes of the colonial powers in dealing with the countries that are rich in natural resources, just at the time when the colonial powers have learned from their past mistakes and are trying to rectify them. In order to gain access to natural resources, China is dealing with the rulers, and neglecting their people. This helps oppressive and corrupt regimes to stay in power. [China is quick to rebuff any objections to this approach from ex-colonial powers who did the same thing not to long ago.]

This has pushed China into dealing with those countries that the international financial institutions have shunned… Burma, Sudan, Zimbabwe, the Congo, Angola and Guinea are examples.

China prefers to expand on a bilateral basis, dealing with each country individually rather than with the international financial system. It does this at the same time as it is pegging its currency to the U.S. dollar, which keeps it very low, allowing the Chinese government to harvest the fruits of cheap Chinese labor through its undervalued currency. China is also promoting the use of Special Drawing Rights (SDRs) rather than the U.S. dollar as the basis for an international currency.

A new multilateral system based on sound and fair global principles is required, rather than trying to change the existing system, which is mired in existing legal and power structures which are very difficult to change. It would bring those countries who are in ascendance to the table as equals, and relinquish power of those countries who were powerful back when the existing system was created, but who are no longer as powerful.

We do need an alternative financial currency to the U.S. dollar such as SDRs, which are denominated in a range of national currencies. This would remove the dollar’s special and unfair advantage, but it could be done very slowly, and with that alternative, the dollar could still re-establish itself as the preferred single reserve currency, provided it’s prudently managed.

SDRs can be used to allow the international creation of money, which would be useful at times like the present.

Both the U.S. and China would benefit from such a strategy, if their leadership were far-sighted enough to see that neither will survive under the current circumstances… and both need each other in any kind of future world order.

The U.S. economy, as well as democracy, is in deep trouble in America. The financial crisis has inflicted hardship on a population that doesn’t like to face harsh realities. President Obama has deployed the confidence multiplier and claims to have contained the recession. If there is a double-dip recession, the population will become susceptible to all kinds of fear-mongering and populist demagogy. If President Obama fails, the next administration will be sorely tempted to create diversions from troubles at home, and that could be very dangerous for the world.

What is needed is the recognition by the U.S., China, and the world, that the system is broken and needs to be reinvented. Every country must rise to the occasion and do the difficult political work of changing their own sovereign systems to create a world that works for everyone. It is no exaggeration to say that the future of the world depends on it.